Communism as a political movement may be dead, but Marxism as an intellectual movement lives on. This year marks the 150th anniversary of the publication of Karl Marx and Frederick Engels’s profound polemic, Manifesto of the Communist Party. The date may have been missed by devotees of the free market, but the 1848 pamphlet is being reviewed and celebrated by radical intellectuals everywhere. A dressed-up “modern” edition has just been published, with an introduction by historian Eric Hobsbawm, who presumably would like to reignite the dying flames of Marxist dogma.

Gary North has his “fat book” theory: all revolutionary works are tomes of biblical proportion. Adam Smith’s The Wealth of Nations, Ludwig von Mises’s Human Action, and Ayn Rand’s Atlas Shrugged come to mind. Marx wrote a three-volume work, Das Kapital. But there are also a handful of declarations, pamphlets, and small books that have changed the world. Thomas Jefferson’s “Declaration of Independence,” Tom Paine’s Common Sense, and the Four Gospels of the New Testament are good examples.

The Communist Manifesto fits into the second category. In rereading it, I couldn’t help feeling the passionate power, the pungent style, and the astonishing simplicity of Marx and Engels’s words. I can easily see how a young revolutionary could be swayed by these unforgettable lines: “A specter is haunting Europe—the specter of Communism. . . . The history of all hitherto existing society is the history of class struggles. . . . Let the ruling classes tremble at a communistic revolution. The proletarians have nothing to lose but their chains. They have a world to win. WORKING MEN OF ALL COUNTRIES, UNITE!”

I can remember feeling similar emotions when I read Murray N. Rothbard’s What Has Government Done to Our Money?, first published in 1963 (Mises Institute, 1990). It will change forever your view on money and economics. And his penetrating essay, “The Great Society: A Libertarian Critique,” will forever change your outlook of government.[2] Rothbard is the free market’s answer to Marx.

Market vs. Government Failure

But the attraction of The Communist Manifesto is ideological as well as emotional. How can anyone not be moved—favorably or unfavorably—by this critical appraisal of “bourgeois” capitalism: “The bourgeoisie . . . has left remaining no other nexus between man and man than naked self-interest, than callous ‘cash payment.’ It has drowned the most heavenly ecstasies of religious fervour, of chivalrous enthusiasm, of philistine sentimentalism, in the icy water of egotistical calculation. It has resolved personal worth into exchange value, and in place of the numberless indefeasible chartered freedoms, has set up that single, unconscionable freedom—free trade. In one word, for exploitation, veiled by religious and political illusions, it has substituted naked, shameless, direct, brutal exploitation.”[3]

Marxist rulers may no longer control the political and economic lives of millions, but their ideology of exploitation, alienation, and class struggle still haunts the academic world of law schools, sociology departments, and literary-theory classes. According to Hobsbawm, Marx’s insights on capitalism are relevant today. Hobsbawm envisions capitalism as “a world system capable of marshalling production on a global scale; its devastating impact on all aspects of human existence, work, the family and the distribution of wealth; and the understanding that, far from being a stable, immutable system, it is, on the contrary, susceptible to enormous convulsions and crisis, and contains the seeds of its own destruction.”[4] And I thought Austrians were doomsdayers!

The Marxists of yesteryear are the social democrats of today. M.E. Sharpe, publisher of Challenge magazine, recognizes the mistakes of Marx and Engels, such as failing to consider the vast improvement in the living standards and real wages of “the working class” during the twentieth century, but still grants Marx’s main theme, “the celebrated characterization of mid-century capitalism as an enormously expansive but unstable system of production.”[5]

But modern-day followers of Marx focus too much on the alleged failures of the market. Today the best and the brightest of economists are investigating the problems of society in terms of “government failure”—public education, corporate welfarism, monetary manipulation, price controls, and state interventionism.

The Declining Marx

Fortunately, Marxist influence among academic economists appears to be on the wane. It was in its heyday in the turbulent 1970s, when Paul Samuelson remarked in the tenth edition of his celebrated economics textbook (1976) that “at least a tenth of U. S. economists” fell into the “radical” category.[6] E.K. Hunt’s radical textbook, Economics: An Introduction to Traditional and Radical Views, was last published in 1990 and is out of print. Today’s hotbeds of Marxism may still exist in a few universities in Massachusetts and California—and strangely enough Utah—but in the main, Marxism has lost its mystique. The Union of Radical Political Economists still gathers the faithful at the annual meetings of the American Economic Association, but attendance is low.

Marx’s Critics

There have been some excellent criticisms of Marx. Austrian economist Eugen Böhm-Bawerk was the first to offer a devastating attack on Marxist’s theory of exploitation and surplus value, from which the Marxists have never fully recovered. Böhm-Bawerk demonstrated that entrepreneur-capitalists take greater risks than wage-earners, which justifies the disparity in income levels. Oddly enough, Böhm’s book, Karl Marx and the Close of His System (Orion Editions, 1984), is published by Marxists, with rebuttals by Rudolf Hilferding and Paul M. Sweezy. More recently, David Conway’s A Farewell to Marx (Penguin Books, 1987) has received high praise for his deft criticisms. The best biography of the father of communism remains by far Robert Payne’s Marx (Simon & Schuster, 1968). Now that The Communist Manifesto is back in print, perhaps it’s time to bring Payne’s book back, too.[7]

A fascinating update on Marx’s life is found in Gary North, “The Marx Nobody Knows” in Requiem for Marx, ed. Yuri N. Maltsev (Auburn, Ala.: Mises Institute, 1993). This book contains some excellent material on Marxism written by Austrian economists.

THE FREEMAN

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December 2014

Unfortunately, educating people about phenomena that are counterintuitive, not-so-easy to remember, and suggest our individual lack of human control (for starters) can seem like an uphill battle in the war of ideas. So we sally forth into a kind of wilderness, an economic fairyland. We are myth busters in a world where people crave myths more than reality. Why do they so readily embrace untruth? Primarily because the immediate costs of doing so are so low and the psychic benefits are so high.